Rug pulls—scams where developers attract investors to a token and then withdraw its value—continue to pose a notable threat to cryptocurrency investors. New tokens, DeFi projects and meme coins are especially vulnerable because token creation is inexpensive and social media amplifies outreach.
Scale of the Problem
Chainalysis reported that 2,063,519 tokens were launched in 2024, of which 873,957 reached decentralized exchanges (DEXs). Applying transaction and liquidity criteria, the firm identified 74,037 tokens that met its suspected pump‑and‑dump definition, representing 3.59% of all launches and roughly 8.5% of DEX‑listed tokens.
The analysis also showed that about 94% of liquidity pools linked to these flagged tokens appeared to have been rug‑pulled by their creators, often within the same day the token appeared.
Liquidity Findings from Solidus Labs
Solidus Labs examined more than seven million tokens launched through the Pump.fun platform that had recorded at least five trades. After excluding tokens that migrated to the Raydium exchange, the study found that 98.6% of the remaining tokens fell below $1,000 in liquidity, making meaningful trading difficult.
Contextual Figures
Chainalysis estimated that crypto‑related scams and fraud generated approximately $17 billion in illicit proceeds in 2025. This broader figure encompasses many fraud types beyond rug pulls.
Typical Rug Pull Mechanics
Most rug pulls follow a five‑step pattern: token creation, promotion, capital collection, value extraction, and project abandonment. Common variants include liquidity removal, token dumping, honeypots, minting exploits, slow drains, and outright exit scams. Warning signs such as unlocked liquidity, concentrated token ownership, restrictive smart‑contract code, and opaque finances can help investors assess risk.
Legal Cases Illustrating the Issue
The SafeMoon case underscores the danger of misleading liquidity claims. In February 2026, the U.S. Department of Justice sentenced SafeMoon CEO Braden John Karony to 100 months in prison and ordered forfeiture of about $7.5 million after a jury convicted him of securities fraud, wire fraud and money laundering.
Separately, the LIBRA meme coin, promoted by Argentine President Javier Milei in early 2025, experienced a rapid price collapse and faced allegations of insider activity, though a later judicial review dismissed the investigation.
Investor Guidance
While audits and verification tools can identify technical vulnerabilities, they cannot guarantee honest conduct. Investors are advised to scrutinize liquidity controls, token distribution, contract permissions and the credibility of promotional claims before committing funds.
